Market Performance

The Australian market posted a solid return with the S&P/ASX 200 Accumulation up 3.3%. Locally, gains were driven by telecommunications (+8.3%), A-REITs (+7.7%) and consumer discretionary (+6.2%) sectors. Energy (-6.5%), information technology (-1.3%) and materials (+0.8%) were the laggards. European equities posted strong outperformance last month on the back of the European Central Bank (ECB) launching a quantitative easing program that in total is designed to inject more than €1 trillion into the euro zone economy. The German DAX was up 9.1% and the French CAC40 finished 7.8% higher, significantly outperforming US markets with the S&P 500 and Dow Jones down 3.1% and 3.7% respectively.

Oil prices suffered heavy double digit falls for a fourth consecutive month with West Texas crude down 11.1% following a December reduction of 18.6%. The LME base metals index was down 6.8%, its third consecutive negative month and was led by a sharp 13.4% drop in copper prices. Bulks continued to be under pressure with iron ore down 8.7% and coal (low sulphur) off 5.4%. The Australian dollar fell 4.8% against the US dollar, whereas gold bucked the trend with an 8.0% rise aided by the ECB quantitative easing program.

In the US, economic data indicated the vital consumer component of the economy is generally healthy. The unemployment rate fell another tenth to 5.6%, down from 6.7% at the end of 2013. Payroll data was stronger than expected and consumer optimism reached the highest level in the past decade in the January 2015 University of Michigan survey. The euro zone officially tipped into deflation in December, with annual consumer prices falling a steeper than expected -0.2%. In China, data suggests manufacturing activity is barely expanding. The official purchasing managers’ index for manufacturers slipped to a barely positive 50.1 in December. Domestically, business conditions are patchy and confidence remains at its lowest level since the pre election jump in mid 2013.

Mid Cap news for January included TPG Telecom (TPM) withdrew its fibre-to-the- basement (FTTB) products from sale following news the Government is issuing a new licence condition requiring FTTB providers targeting the residential market to structurally separate wholesale services. Bradken (BKN) announced the private equity consortium which made a takeover proposal in December has withdrawn its offer due to an inability to secure financing on acceptable terms. Alumina (AWC) noted margins at the Alcoa alumina business improved in the fourth quarter due to stronger alumina prices, lower energy costs and favourable currency movements. GUD Holdings (GUD) reported 1H15 earnings before interest and tax of $27.9m, a 16% improvement on the previous corresponding period and attributed the rise in earnings to improvement programs in its Davey, Dexion and Sunbeam businesses.

Attribution Analysis for the month ended January 2015

Top 5

Bottom 5

ResMed inc

Sims Metal Management

Platinum Asset Management

Challenger

Nufarm

Transfield Services

Flight Centre

MMA Offshore

M2 Group

Whitehaven Coal

Fund Performance

In January the Concise Mid Cap Strategy returned 1.32%, with the Mid Cap Master benchmark up 2.61%%. Best performers for the month were Resmed (RMD), Platinum Asset Management (PTM)) and Nufarm (NUF) while Sims Metal Management (SGM), Challenger Financial (CGF) and Transfield Services (TSE) detracted from performance.

Resmed (RMD) reported a strong second quarter result which exceeded market expectations. All regions grew at a double digit rate during the second quarter. Product launches, continued market penetration and growth in high margin disposable products categories underpin our positive investment thesis.

Qube (QUB) announced the early termination of a contract with Arrium (ARI) where it was providing road haulage services from an iron ore mine to a railhead. The contract changes are not expected to have a material impact on QUB. The outlook for QUB continues to be favourable with the proposed development of Moorebank expected to place QUB in a strong position to take advantage of the shift in container movements from road to rail.

Outlook

February will see the majority of companies report their 1H15 results and while the domestic economy remains subdued, company outlook statements will be critical to determine the earnings growth profile for 2H15 and what momentum this carries into FY16 earnings.

With recent rate cut by the Reserve Bank of Australia in early February, equity markets continue to rewarded stocks displaying high yield and defensive characteristics. This reporting season we will pay particular attention to the funding sources to sustain current dividend payments. As the low growth economic environment appears set to continue are dividends sustainable from operating cash flows or are companies sourcing dividend proceeds from increasing their debt position. While many companies’ results and outlook will justify the recent strong share price rally we remain cautious regarding several industries reliant on an improvement in domestic economic conditions.

Our investment focus remains disciplined to searching for companies that have the ability to generate growing cash flows that can be reinvested back into the business generating superior rates of return for shareholders without incurring balance sheet stress.

*The Mid Cap Masters Index is a price and accumulation price, free float adjusted index calculated daily for Concise on behalf of S&P. The constituent universe of index is the S&P/ASX 200 excluding the S&P/ASX 50. * The CMCF commended on the 16th of April 2008. The since inception figure is annulaised.

This publication is intended to provide general information only and has been prepared by Concise Asset Management (ABN 62 126 975 282) and (AFS Licence No. 320497), the issuer of the Fund, without taking into account any particular person’s objectives, financial situation or needs. Investors should before acting on this information, consider the appropriateness of this information having regard to their personal objectives, financial situation or needs. Your investment is subject to investment risk, including possible delays in repayment and loss of income and capital invested. The repayment of capital or income is not guaranteed by Concise Asset Management. Offers of interests in the Fund are contained in a current Product Disclosure Statement (‘PDS’). A copy of the PDS is available from our website: www.conciseam.com.au or contact Client Services on (03) 9642 8968. You should read the PDS and seek professional advice before making any decision about whether to acquire or continue to hold an investment in the Fund.